Clarifying the matter of Debt Counselling Fees
Debt counsellors are independent and work, either for a company providing debt counselling, or for themselves. Debt counsellors must apply for registration and must comply with statutory requirements. Registered and de-registered debt counsellors are on the NCR’s website database, http://www.ncr.org.za. CONSUMERS MUST ALWAYS REFER TO THIS SITE BEFORE APPOINTING A DEBT COUNSELLOR.
The consumer must fees as per the NCR’s Guidelines –
For Services rendered;
To ensure a viable repayment plan;
To negotiate with credit providers;
To ensure that a re-arrangement order is granted by a Court.
To attend to all other duties imposed on her as per the Act.
On application, the applicant (“consumer”) is required to pay an application fee of R50 (exc VAT) for assessment purposes.
An administration fee of R300 (exc VAT) fee is payable upfront and in full for the consultation, and initiating of the debt review process up to the acceptance or rejection of the application.
A determination fee is payable in the first month after drafting and submission of proposals a up to a maximum of R8,000 (exc VAT) for a single application and R9.000 (exc VAT) for a joint application (i.e. husband and wife married COP). If the first instalment (“distributable amount”) payable to the creditors is less than the above stated amounts, the debt counsellor may only ask the lesser amount.
A reckless credit fee of R1.500 (exc VAT) per application is payable in the second month for a reckless lending assessment;
An aftercare fee, payable in every month after month 2 in which aftercare services are rendered, equal to 5% of the distributable amount or a maximum fee of R450.00 whichever is the lesser.
An NCT submission Fee of R500.00 (excl the NCT filing fee), payable in month 2 after completion of the restructuring process.
An attorney fee of R500 payable to the attorney in the third month for drafting, and a negotiated fee for attendance of court as per pro forma invoice.
Payment for a Credit Bureau report, payable in the first month with a maximum of R80.00.
A payment distribution agent’s fee for the distribution of money, payable from inception and payable monthly.
There will be
- no payment to the creditors during the 60 day restructuring period. (It is strongly recommended that payments commence as soon as possible to reduce the inevitable defaults); and
- a guaranteed payment for restructuring of the payments (including the negotiations with creditors) and legal fees.
Payments to creditors must resume as soon as possible to prevent –
- an unnecessary payment holiday;
- money spent unwisely; and
- balance increases